I am developing a web application to upload .mp3 files and need to play them. I successfully uploaded the files and saving them in C:/uploads folder. I understand that as it's a web application we need to save them in the Apache web server it self. But I am not sure, where to save them.

Accepted Answer

You can use content repositories to store uploaded data, I think this is common approach. For instance, take a look at the Apache JackRabbit CR, applying it you won't easy look for uploaded files on hard drive, but you will have web interface, and also some other tools available to connect to repository and show you files there etc.
As alternative to JackRabbit, you can try Alfresco CMS, they both implement JCR, other implementations are listed here (you will them at the bottom of that page).